OFF THE CHARTS; Snow Did Well on the Economy, but His Boss Did Poorly in the Polls

By Floyd Norris

Published: June 3, 2006

IF presiding over a growing economy with low inflation was the measure of a good Treasury secretary, then John W. Snow would be leaving his position with accolades all around, and Henry M. Paulson Jr., his chosen successor, would be said to have a tough act to follow.

To assess the tenure of Treasury secretaries, the economy's performance under Mr. Snow was compared with the performance under each of the previous 10 secretaries, going back to William E. Simon, who served Presidents Richard M. Nixon and Gerald R. Ford from 1974 to 1977.

The measurement ranked each tenure on the basis of annual growth in real gross domestic product and payroll employment, as well as on the performance of the dollar, the stock market and the Consumer Price Index. Low inflation rates were considered good, while rises in everything else were viewed as indicative of success. The ratings were combined on a scale of one point for a first-place finish in a category, down to 11 points for a last-place position.

Measured that way, Mr. Snow's tenure ranks second, behind that of Robert E. Rubin, the secretary for much of President Bill Clinton's time in office, and a man to whom Mr. Snow has often been critically compared. Mr. Snow did well on economic growth, inflation and the stock market. He ranked in the middle on employment growth, and lagged only in the performance of the dollar.

So why were some Republicans so eager to get rid of Mr. Snow, and why did some on Wall Street ask why Mr. Paulson, the chief executive of Goldman Sachs, would want the job? Some think that Mr. Snow played little role in formulating economic policy, instead serving as a not-very-effective salesman for policies that came out of the White House. Others do not like those policies, and point to large budget and trade deficits as reasons to think the good times are in jeopardy.

The reality, of course, is that neither the Treasury secretary nor his boss, the president, really bear much responsibility for short-term changes in the economy. Mr. Snow entered office after the recovery from the 2001 recession was well under way -- a recovery he never failed to credit to the tax cuts. Giving him credit for the recovery, and blaming his predecessor, Paul H. O'Neill, for the recession and stock market plunge, is not fair to either man.

The real reason for Mr. Snow's departure may be that the good economic performance has not helped where it really matters -- at least in Washington. He is leaving with the approval rating of his president, as measured by the most recent Gallup poll, at 33 percent. Only one Treasury secretary has left with a lower presidential approval rating.

That secretary, W. Michael Blumenthal, also had the most economic growth of any secretary before he left, in 1979. He later joked that when a president's approval rating was lower than the prime rate, it was time for a new secretary. In fact, the prime rate did not get that high, but rising interest rates and inflation did help to destroy the popularity of President Jimmy Carter.

Note: Figures show compound annual change during each secretary's term. When two secretaries served during a month or quarter, the secretary with the longest service in the period is given credit for that period's performance. Figures reflect growth of real gross domestic product, rise of Consumer Price Index, growth of total payroll employment, change in Standard & Poor's 500-stock index and average move of the dollar against Japanese yen and euro, with German mark figures used before euro was created.